APCO’s European operations have been growing steadily—and becoming more profitable—for the past several years, and 2004 continued the trend, with revenues of €14.6 million, up a little more than 10 percent over the previous year. The firm is projecting even stronger growth in 2005, and expects to finish the year with European revenues of around €16.3 million—about 30 percent of the group’s worldwide fees. The business has been growing organically—long-time clients like Microsoft, GML, Dow Corning, Borealis, and Coca-Cola are being served in new markets or with additional disciplines—and with new business, including CIAA, the Business Software Alliance, Time Warner (for policy analysis and crisis counsel), the World Customs Organisation (for media relations), and pharmaceutical industry group EFPIA. The bulk of the work is now either long-term projects (as opposed to the short-term assignments that are characteristic in the public affairs arena) or retainer-based. Even more impressive, there have been no significant client losses so far in 2005.
APCO now has nine offices in Europe, with London and Brussels (45 and 35 people respectively) by far the largest. But the network is growing at a healthy pace, with 10 people in France, Germany, and Russia (where the client base has also diversified considerably) and slightly fewer in Italy, Switzerland, and South Africa. A new strategic partnership in the Arab world, with APCO’s own people working alongside professionals from management consulting firm Talal Abu-Ghazeleh, was supplemented by a new operation in Israel, which opened its doors in September. Almost half (48 percent) of APCO’s EMEA income comes from multi-office accounts, and the firm’s five largest clients—GML, Microsoft, Alfa Group, Novartis and Borealis—are served across multiple offices.
APCO’s North American operations are still heavily concentrated in its Washington, D.C., headquarters, where the industry-leading public affairs practice shares space with an impressive healthcare policy group and growing capabilities in corporate communications and even business-to-business marketing. The firm’s expansion into New York—the next logical location for a firm specializing in mission-critical issues—has been slow, but it does have growing operations in Seattle (targeting the Pacific Rim), Sacramento and Phoenix. In Asia, meanwhile, the firm is best known for its work helping U.S. and European companies navigate the choppy political and bureaucratic waters of China, although with 90 people across the region it is becoming a serious player on a wide range of Asia-Pac issues. More than 40 clients are now shared by three or more offices around the world.
APCO doesn’t structure its practice areas like most of its competitors. Because of its roots in the public affairs and government relations arena and its ambition to focus on C-suite issues, it offers three categories of service: strategy services, which include mergers and acquisitions, litigation, market entry and investment strategy (most notably in developing markets), issues management and public education, and internal communication; reputation services, which include positioning, crisis management, and corporate responsibility; and governance services (probably the least developed in Europe), which include investor relations, restructuring and board communications. These are supported by specialists in disciplines such as media relations, government relations, coalition building, online communication, research, and creative.
EMEA chief executive Brad Staples has a strong team of office managers including Laurent Chokouale Datou in Brussels, Claire Boussagol in Paris, Martina Tydecks in Berlin, and Ivo Ilic Gabara in Italy, while in London, new U.K. managing director Simon Miller, who joined last year, has helped get the business back on an upward trajectory. New additions included Christine Chauvet, former French secretary of state for external trade, who was named senior counsellor in Paris; Darren Murphy, former special advisor to Prime Minister Tony Blair, as director in London; Brandon Mitchener, former EU correspondent for the Wall Street Journal, who was named director in Brussels; and Steven Dalziel, former Russian affairs analyst at the BBC World Service, who is a specialist in emerging markets. Most of the other changes over the past 12 months have been designed to strengthen the firm’s management infrastructure in Europe, with several senior executives taking on new positions: Rachel Thompson was named to lead the firm’s client service and knowledge management initiatives; Cleopatra van de Winkel was named to coordinate the firm’s partnership in the Arab world; and Siobhan Aalders was put in charge of marketing and internal communications.
The most immediate impact of APCO’s management buyout was internal, providing new incentives for key people and renewed impetus for the firm’s investment in professional development. In the past 12 months, the firm has developed a new performance-based compensation programme, with stock awards; a new performance feedback system; the implementation of global HR information system; and the expansion of the global exchange programme, which provides the opportunity for employees at all levels to spend time in other offices. The comprehensive professional development programme includes courses on the business of the business, public affairs and strategic communications, C-suite issues and counselling, managing staff, and client service. “The Global Retreat in April of this year was a real milestone for our business,” says one respondent to our Best Consultancies to Work For study. “It really feels as if we are now masters of our own destiny and if we continue to live our vision and values, then we are well placed to take another big leap forward.” Says another, “Our work is frequently at the forefront of public interest, and never fails to stimulate.”
APCO Insight, the firm’s research unit, developed the Insightpoll.com Opinion Elite Panel: a representative sample of the most active and informed citizens in terms of media consumption, interest in public policy and civic participation across 10 countries in North America, Europe and Asia-Pacific. In addition to using Insightpoll.com for multiple clients in 2004, APCO conducted a Global Corporate Social Responsibility Study among the panel to shed new light on the perceived value of CSR communication. In Europe, the unit’s second generation reputation research model is part of Public Affairs Monitor, an integrated system for tracking opinion shift among policy, media, and other stakeholder audiences.
So much of APCO’s work is confidential, dealing as it does with sensitive issues, but its continued work on behalf of Mikhail Khodorkovsky, the Russian oil executive sentenced to nine years in prison after a trial widely viewed as politically-inspired, has been widely discussed and provides an excellent example of the kind of high-profile issues in which the firm is involved. The firm’s potent M&A practice is another that works mostly on confidential basis, although its work with Microsoft has been much-publicized. On the CSR front, meanwhile, the firm works with several major corporations, including Microsoft (in Africa as well as Asia), Johnson Controls on sustainability issues, Nike on its citizenship efforts in response to complaints about labour practices, and pharmaceutical giant Novartis.
Even before its buyout from Grey Worldwide, APCO was establishing itself as a unique competitor among the top-tier global communications networks, with its roots in public affairs and growing expertise in strategic corporate and financial communications. Over the past 12 months, it has achieved even greater recognition, being named European Consultancy of the Year by Public Affairs News. “The work APCO has implemented since autumn 2004 has helped transform the awareness of STERIS among a wide range of key target audiences, including governmental, political, healthcare professionals, the media and patient groups,” says Kevin Marsh, senior director of communications services. Says Richard Saunders, senior corporate PR manager for Microsoft EMEA, “APCO has consistently demonstrated its ability to understand the intricacies of Microsoft’s business, as well as the markets and political environments in which we operate… They help us make the tough decisions and back up their advice with effective and planned execution.” In a recent survey, 90 percent of clients indicated their willingness of recommend APCO, and indeed 68 percent of the firm’s new business comes via referral.
APCO is no longer the niche public affairs firm it was a couple of years ago. The firm has expanded its service offering in Europe, where it should now be considered among the leaders in corporate social responsibility and crisis management, as well as public policy issues, and where its broader corporate reputation business continues to grow. No, APCO is not a competitor for every major account that comes down the pike—it’s never going to be the world’s most creative consumer shop—but it is a contender for serious high-profile (and high value) strategic communications assignments.